Singapore's small land area makes it difficult to build large-scale renewable power plants: Reuters
[Singapore = Mayuko Tani] Renewable energy import business has started in Singapore. Government conglomerate Keppel Corporation began imports from Laos in June. Plans from Australia and Indonesia will also be withheld. This is because there is a shortage of land for renewable energy generation in the country, making it difficult to achieve the goal of decarbonization. Although it is likely to bring a breath of fresh air to the concept of power interchange in the region, some twists and turns are expected as it is a field related to national security.
Keppel travels across four countries from Laos
Renewable energy transmission southward from Laos to Thailand, Malaysia and Singapore began in late June. Keppel acquired the first power importer's license just introduced by Singapore. First, on a trial basis, a total of 100,000 kilowatts of clean electricity generated from hydroelectric power will be imported from the Lao Electric Power Corporation for two years, leading to full-scale commercial operation. According to Keppel, "it's running fine."
For Keppel, the environmental infrastructure business is a pillar of its growth strategy. The company is searching for business opportunities in the renewable energy business widely in Southeast Asia, and "expands the cross-border power trading business over the long term," according to an executive.
The procurement network for renewable energy also extends to the Southern Hemisphere. In the desert region of Australia's Northern Territory, Australian start-up Sun Cable will develop a large-scale solar power plant (mega solar) with a power generation capacity of 2 million kilowatts on a site of 12,000 hectares. Singapore envisions importing electricity from here via a 4,200-kilometer submarine cable.
The development cost is expected to exceed approximately 30 billion Australian dollars (approximately 2.8 trillion yen). Macquarie Capital and others were appointed as funding advisors in July. Construction is scheduled to start in 2024, with the aim of full operation by 2029.
■ Geographically unsuitable for natural energy development
Singapore is moving to import renewable energy because it is difficult to significantly expand power generation facilities in its small country. The country is accelerating the introduction of renewable energy with the aim of becoming carbon neutral (net zero greenhouse gas emissions) around 2050. However, it is geographically unsuitable for wind, geothermal, and hydroelectric power generation. Solar power cannot produce mega solar power, and there is a limit to how much solar panels can cover the rooftops of buildings.
Furthermore, in recent years, the price of natural gas has skyrocketed due to the situation in Ukraine, and Singapore's distorted energy mix, which relies on gas-fired power for 95% of its power generation, has begun to be viewed as a problem. The renewable energy ratio is currently only 3.2%. There is also a desire to diversify power sources through imports and stabilize prices.
In October 2021, the government set a goal of increasing renewable energy imports to 4 million kilowatts, equivalent to 30% of the electricity supply, by 2035. A licensing system was introduced for the import business, and business plans were solicited from private companies. In addition to Keppel, more than 20 companies, including local Semcorp Industries, as well as Western and Chinese companies, have applied.
■ Relying on foreign countries remains unchanged
Europe has taken the lead in cross-border power interchange, while Southeast Asia, which has underdeveloped domestic power grids, has lagged behind. In addition to being limited to bilateral transactions between Laos and Thailand and other countries on the Indochina Peninsula, buyers such as Thailand invest in facilities in Laos and use the country as a power generation base, rather than power interchange.
Even with renewable energy, the power generated from wind power, geothermal power, and tidal power, which operates day and night, would like to sell the excess power and turn it into a profit for the companies that develop it. Having the option of exporting may increase the willingness to invest in renewable power generation.
Keppel places renewable energy business as a pillar of its growth strategy (Singapore offshore solar power plant)
However, as Singapore moves forward with its plan to import renewable energy, it faces the risk of continuing to rely on foreign countries. Malaysia and Indonesia have put a hold on renewable energy exports in order to prioritize their own consumption of electricity.
■ Neighboring countries prioritize their own supply for the time being
EDPR Sunseap, a Portuguese solar power generation company, has agreed with the provincial government to install a mega-solar plant on the coast of Riau Islands, Indonesia, a stone's throw from Singapore, and export it to Singapore, but has not been able to start construction. . YTL Power Seraya, a Malaysian conglomerate, has also postponed the trial import of renewable energy from Malaysia, which was scheduled to start in early 2022.
Sunseap emphasizes that it is a long-term strategic project that is supported by the governments of both countries, but success or failure depends on the Indonesian government. Singapore also relies on imports from Malaysia for much of the water it consumes. The increasing dependence on lifelines, including electricity, raises security concerns.
``For many Southeast Asian countries, domestic demand is a priority, with exports secondary,'' said Norman Waite, an analyst at the Institute for Energy Economics and Financial Analysis (IEEFA). Even if the project does get started, he warns of the possibility of supply disruptions due to protectionist policies of exporting countries and worsening bilateral relations.
Nuclear Power Plants and “Decarbonized Fuels” for Stable Electricity
In Singapore, the public and private sectors are embarking on multifaceted efforts to stabilize the power supply.
"We should pay attention to new technologies such as small modular nuclear reactors." In March, a panel of experts convened by the Energy Market Supervisory Authority (EMA) recommended to the government to resume consideration of nuclear power, which it had rejected in 2012. Decarbonized fuels such as ammonia and hydrogen, which do not emit carbon dioxide (CO2) when burned, are also an important option.
Regarding the energy composition in 2050, the expert panel stated that (1) if international collaboration and technological innovation progressed, "imported electricity and hydrogen would each account for 40%, followed by geothermal and solar power." %, hydrogen 10%, natural gas, solar power, and geothermal heat for the rest.” ③ Even if technological innovation progresses, if international cooperation recedes, “60% hydrogen, 25% imported electricity, 10% nuclear power, and the rest solar power. Geothermal" -- three scenarios were presented.
Keppel is also working on decarbonized fuels. An affiliated company has teamed up with Sumitomo Corporation to begin research into the commercialization of offshore thermal power generation using ammonia. In January, Singapore's sovereign investment fund GIC also invested in Intercontinental Energy, which aims to produce large-scale hydrogen and ammonia in Australia and the Middle East.
